The points below are general comments compiled from experience in dealing with a variety of properties and should not be used by anyone seeking to enter a lease without obtaining specific formal professional advice from their solicitor or surveyor.

1) Not aligning their property strategy with their business strategy.

22) Not considering the “Green-ness” or energy efficiency of a property and future potential implication in terms of cost and impact on business.

23) Agreeing to pay the landlords legal costs!

Click the link below to read the article that appeared in the Business section of the Bath Chronicle on 22/04/2010.

Potential In Bath Property Market

Property Service Charge – Top 10 Tips for Tenants

By: Jamie McNeil 12th March 2010

1) Check that each service charge invoice is issued in accordance with the terms of your lease. Your lease dictates when and how much service charge you should pay.

2) When you get a service charge budget or reconciliation check it has been issued in accordance with your lease, check the services listed to ensure that all of the costs are legitimately recoverable from you.

3) When you receive a service charge reconciliation ask the landlord for full details of expenditure and request further clarification on specific items of concern.

4) Speak to other tenants to establish their opinion on service charge costs and also the quality of service provided by contractors or suppliers instructed by the landlord or managing agent. Discuss ways that the landlord may be able to reduce costs while maintaining essential services and put these views to the landlord for consideration.

5) Go over in detail landlords refurbishment plans before they start to establish how much you are being asked to contribute. Also check whether replacement works are necessary or whether less expensive repair would suffice. Is the landlord trying to recover the cost of improvements, additions or upgrades and if so are you obliged to pay your share towards these costs?

6) Check the apportionment of costs, does your lease have a fixed percentage you should be paying, if not establish from your landlord how they have arrived at your percentage share. Is your share reasonable?

7) Check the service charge rate per square foot, is this in line with other property that you occupy and similar properties?

8) Check that the services in the budget or reconciliation have, or are actually, being provided and that they are not over specified. Are costs being pushed through the service charge as you near the end of your lease?

9) Maintain an open dialogue with your landlord or managing agent and attend tenants meetings to ensure that your concerns about services are being addressed and also to ensure that you are kept informed of any variations from budget. These forums are excellent for voicing concerns regarding the quality of services and for ensuring that your landlord is regularly re-tendering contracts. It is also good practice to ensure that minutes of these meetings are recorded and kept

10) If in doubt ask a specialist surveyor or solicitor for advice.

Property Service Charge – Top 10 Tips for Tenants.pdf

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It was interesting to read that the service charge dispute at the Westfield London shopping centre is still rumbling on. In just over a year the Landlord is facing a second revolt from occupiers unhappy that service charge levels are running at just under £13 per square foot. According to reports this is down from a high of nearly £14 per square foot earlier this year. The service charge  payable has been reported as being as low as £8.50 per square foot when the scheme first opened.

It is not surprising therefore that some tenants are still unhappy about these sort of costs. In this market every tenant is trying to keep costs to a minimum and for many their very livelihood depends on them succeeding at doing just that. Disputes such as the one at Westfield London are never easily resolved, there is seldom a straightforward black and white solution to the problem and these disputes can only be resolved if both parties give ground. Is it a case of the landlord or the tenant or both digging their heels in? Or is it a case of the service charge consultants representing the tenants not doing their job properly?

Is Westfield London a case of a landlord setting artificially low initial service charge costs to lure tenants into the scheme, followed by a hike to realistic levels once the tenants are on the hook? Or is it that £13 per square foot is what it costs to run Westfield London operating at full tilt?  The cost increases may indeed be fully and legitimately recoverable from the tenants. After all a scheme with Millions of shoppers passing through the doors each year is likely to have significant repair costs and it is entirely possible that these along with utilities and other  costs have significantly exceeded original projections.

On the flip side is it the tenants that are being unreasonable? Are they happy to have all the trappings of a prestige mall but don't want to pay for it? Have they requested or made demands on the landlord that they are now reluctant to pay for?

Complaining about service charges and formally disputing them with a landlord is something not to be taken lightly. Many occupiers face being stripped of any unique special concessions granted by the landlord if they kick up too much of a fuss. Worse still the landlord tenant relationship could breakdown altogether and the whole thing end up in a costly court case benefitting no-one.  

There are landlords and managing agents in the market who are well known for pushing the boundaries of what is legitimately recoverable from tenants under their leases, whether Westfield are one of these I honestly do not know, but I would love to find out. 

westfield service charge.pdf 

Today we launched the Funny Face marketing campaign. Our A4 Flyer will be distributed to 500 Local Business's in Bristol and Swindon. This will be followed up with an email campaign to subscibers. You can view a copy of the artwork here:  "Funny Face" Flyer.pdf